Marijuana Demand Causes Supply Chain Challenges in Canada

Canadian cannabis producers continue to struggle with supply and demand.

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Photo by Get Budding on Unsplash

Since legalizing recreational marijuana in October, Canada's cannabis producers have struggled with low demand. 

According to FreightWaves, the company HEXO reported C$13.3 million in gross revenue for the second quarter of 2019, the first since the country legalized the market. The company had a net loss of C$4.3 million. A report from the Canadian government showed that sales of dried cannabis and cannabis oil had declined slightly in January from the previous month, however, finished inventories of both grew. 

The gap between finished inventories and sales continues to spread, with only 15,600 pounds of dried cannabis being sold in January versus finished inventories of over 40,000 pounds. Meanwhile, the gap was even larger with cannabis oil, FreightWaves reports that 7,800 liters were sold versus finished inventories of 53,000 liters.